Germany’s SWIAT blockchain has been responsible for numerous digital bond issuances in the past few months. Now it has hosted a digital commercial paper issuance by Siemens, which was settled using JP Morgan’s JPM Coin in a delivery versus payment transaction. Ten days ago Siemens issued the €100,000 commercial paper under Germany’s crypto security laws and redeemed it three days later.
SWIAT is the blockchain infrastructure founded by DekaBank, which also counts LBBW and Standard Chartered as joint venture partners, amongst others.
Siemens already has experience of using both SWIAT and JP Morgan’s Onyx blockchain. It was the first JP Morgan client that publicly disclosed using the JPM Coin blockchain-based bank account almost three years ago, to support its treasury department moving money between its global subsidiaries 24/7. It was also the first client to use JPM Coin’s programmability functionality. Earlier this month Siemens issued a €300 million ($333m) digital bond on the SWIAT blockchain settled with conventional central bank money using Germany’s Trigger solution. That transaction was part of the ECB’s wholesale DLT settlement trials.
“By leveraging the innovative blockchain-based cash architecture of Onyx by J.P. Morgan and the advanced DvP capabilities of SWIAT’s platform, Siemens is positioned to fully unlock the transformative potential of blockchain technology for payments and securities settlement,” said Peter Rathgeb, Group Treasurer of Siemens.
“It represents a major leap towards a future where financial transactions are faster, more automated, and carry significantly lower risks.”
DvP with synchronized settlement
JP Morgan uses its synchronized settlement feature to ensure the simultaneous transfer of money on the Onyx blockchain and the delivery of the securities on the SWIAT platform. Settlement took 93 seconds.
When JPM Coin was used with Broadridge’s Distributed Ledger Repo blockchain a few months ago, it used an API. Broadridge uses a different DLT to Onyx, whereas both Onyx and SWIAT are enterprise versions of Ethereum.
Nelli Zaltsman, Head of Platform Settlement Solutions, Onyx by J.P. Morgan said that it aims to be a leader in on-chain settlement solutions with JPM Coin.
“Our Synchronized Settlement capabilities currently use an API-based mechanism that is replicable for a wide range of platforms, which is consistent with our objective of providing a universally adoptable solution,” said Ms Zaltsman.
Meanwhile, German crypto securities require a registrar for all issuances, which was DekaBank in this case.
